What characterizes a "Follow Form" excess liability policy?

A "Follow Form" excess liability policy is characterized by its adherence to the terms and conditions of the base insurance policy it follows. This means that the excess policy does not create its own set of rules but rather mirrors the coverage, exclusions, and limitations of the underlying policy.

When a loss occurs that exceeds the limits of the base policy, the follow form excess policy kicks in to cover amounts above those limits, provided that the loss is also covered by the base policy. This alignment ensures that the claimant does not encounter discrepancies in coverage terms between different layers of insurance.

In contrast to other types of excess liability policies, which might establish their own exclusions or coverage definitions, the follow form type solely relies on the foundational policy's framework. This consistency is crucial for insured parties, as it simplifies understanding their coverage and enhances predictability in claims handling.